Did you apply for the Canada Emergency Response Benefit (“CERB”) only to later realize that you did not qualify? This blog discusses how to promptly act to correct this error.
The Canadian government has made it easy to repay the CERB. Individuals who realize they have received the CERB in error are strongly encouraged to repay any overpayment as soon as the mistake is discovered to avoid legal and tax consequences down the road.
A repayment obligation arises if you no longer meet the CERB eligibility criteria for the 4-week period in question. This could happen if:
- You earned more in employment or self-employment income earlier than expected.
- For your first 4-week eligibility period, you must repay the $2,000 received if you earned or will earn more than $1,000 (before taxes) from employment or self-employment income 14 days in a row during this 4-week period. For all subsequent 4-week eligibility periods you need to repay the $2,000 if you earned or will earn more than $1,000 (before taxes) from employment or self-employment income during that period.
- You applied for the CERB but later realize you are not eligible.
- For example, you do the math more carefully and discover you did not earn $5000 (before taxes) in 2019 or during the 12 months prior to the date you applied for the CERB.
- You received a CERB payment from both Service Canada and the CRA for the same period.
The CERB is taxable income. Therefore, if you do not repay a CERB payment received in error before December 31, 2020 you will receive a T4A tax slip on the amount of CERB you receive and have to pay taxes on the $2000 received. If you repay the CERB before December 31, 2020, the CRA will not issue a T4A for that payment.
- The CRA website has provided the following information to assist with CERB repayments. You may choose one of the following options: Online: using CRA My Account starting May 11, 2020
- Online banking: with your financial institution
- Sign-in to your financial institution’s online banking service
- Under “Add a payee” look for an option such as: CRA (revenue) – tax instalment
- Enter your 9-digit social insurance number (SIN) as the CRA account number
- By mail: mail a cheque or money order to the CRA
- Make the payment out to “Receiver General for Canada”
- Indicate it is for “Repayment of CERB”
- Indicate which eligibility period you are repaying
- Include your Social Insurance Number (SIN) or your Temporary Tax Number (TTN)
- Indicate the reason for returning the payment (not entitled or overpayment).
To mail your repayment cheque, or return CERB cheques that have not yet been cashed, simply do so by using the following mailing address:
Revenue Processing – Repayment of CERB
Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury ON P3A 0C3
If you have questions about eligibility for the CERB or any employment law issue do not hesitate to reach out to one of our experienced lawyers.